Turnpike vendor gifts raises questions on ethics laws

HARRISBURG - The state ethics law requiring public officials to annually disclose gifts above a monetary threshold has been on the books for three decades, but the recent state grand jury report on corruption at the Pennsylvania Turnpike Commission cites examples where two long-time powerbrokers in Harrisburg allegedly ignored the law.

Former Senate Democratic Leader Robert J. Mellow of Lackawanna County didn't report any gifts on his statements of financial interests during the years 2006, 2007, 2008 and 2010 despite being the beneficiary of expensive limousine-driven trips to New York Yankees baseball games and dinners during that period at the expense of PNC Bank, according to the grand jury. PNC received $2.2 million in Turnpike bond underwriting work between 2006 and 2010 when Mellow left office.

One of the state criminal charges against Mellow resulting from the grand jury report is for violating the ethics act by allegedly using his office to secure contracts for vendors in exchange for gifts, political support and campaign contributions.

One-time Senate Majority Leader J. William Lincoln, of Fayette County, who resigned recently as a member of the turnpike commission, received a total of $3,100 in gift certificates to Nemacolin Woodlands Resort from Sucevic, Piccolomini & Kuchar Engineering during 2005 to 2009, according to the grand jury. SP&K received $4.1 million in Turnpike contracts from 2005 through 2010.

The grand jury report includes a table showing the work received by SP&K and the timing of unreported gifts to Lincoln and to former Turnpike chief operating officer George Hatalowich, as well.

Lincoln admitted failing to report the gift certificates on his annual statements of financial interest. Lincoln testified under a grant of immunity and is not charged. Hatalowich faces a conflict of interest charge for violating the ethics act by allegedly accepting Nemacolin gift certificates.

The alleged failure to disclose gifts by Mellow and Lincoln, who were both in the Legislature when the ethics law was enacted in 1978, raises the question of how prevalent flouting of this requirement is. The examples provide ammunition to those calling for a complete ban on gifts to public officials.

If officials don't disclose gifts, the public has few ways of finding out, said Barry Kauffman, executive director of Common Cause Pennsylvania.

"To some degree, it's self-executing," he said. "People are expected to act honestly and report the gifts they receive."

Banning all gifts to public officials would clear up any confusion about gift disclosure thresholds or the value of a gift, Kauffman said.

"The gift ban is the simplest of all solutions," he said.

Under state law, public officials and public employees, candidates and nominees for office are required to file an annual statement of financial interest by May 1, which includes gifts of $250 or more and transportation, lodging or hospitality expenses exceeding $650 or more. Failure to file is a misdemeanor crime with a fine up to $1,000 and/or one year in prison.

For a public official to claim ignorance of the requirement would be a stretch, said Robert Caruso, acting executive director of the state Ethics Commission.

"The commission has gone to great lengths over the years to educate public officials as to what is expected to be disclosed on a statement of financial interest," he said.

If criminal intent is suspected with a non-disclosure, the commission can make a referral to prosecutors, Caruso said.

The commission conducts random reviews to gauge compliance with the requirement. These reviews, along with complaints from the public, can lead to the discovery of non-filers or those who filed incomplete or deficient statements.

Offenders are given 20 days to comply before civil fines are levied. In 2011, the commission issued 13 financial disclosure civil penalty orders resulting in a total of $3,450 in fines being levied.

Capitol activist Gene Stilp said a zero-tolerance gift policy is the only way to go.

"The honor system in Pennsylvania is totally broken," he said.

Contact the writer: rswift@timesshamrock.com

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